L.Subramanian, CHENNAI V. ITO, CHENNAI

ITA 2197/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8842 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 15-06-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 23-11-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: N DEVANATHAN
• Keywords: Capital asset
• Section: 54F; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.2197/MDS/2015 ' (' / ASSESSMENT YEAR : 2005-06 SHRI L. SUBRAMANIAN, NO.26, LAKE AREA, 1 ST CROSS ST., CHENNAI - 600 034. PAN : AXLPS 7177 E V. THE INCOME TAX OFFICER, BUSINESS WARD XV (2), CHENNAI - 600 034. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI N. DEVANATHAN, ADVOCATE ,-*+ . / / RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT 0 . 1$ / DATE OF HEARING : 15.06.2016 2!( . 1$ / DATE OF PRONOUNCEMENT : 15.07.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 4, CHENN AI, DATED 30.10.2015 AND PERTAINS TO ASSESSMENT YEAR 2005-06. 2. SH. N. DEVANATHAN, THE LD.COUNSEL FOR THE ASSESS EE, SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERAT ION IS WITH REGARD 2 I.T.A. NO.2197/MDS/15 TO COMPUTATION OF CAPITAL GAIN AND DISALLOWANCE OF EXEMPTION UNDER SECTION 54 / 54F OF THE INCOME-TAX ACT, 1961 (IN SH ORT 'THE ACT'). THE LD.COUNSEL SUBMITTED THAT THE ASSESSEE ENTERED INTO A DEVELOPMENT AGREEMENT FOR CONSTRUCTION OF BUILDING WITH M/S BALA ABIRAMI BUILDERS & DEVELOPERS (P) LTD. ON 04.03.200 4. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE OWNED 4664 SQ.FT. OF LAND AT DOOR NO.18, I CROSS STREET, LAKE AREA, NUNGAMBAKKAM, CHE NNAI. OUT OF THIS 4664 SQ.FT. OF LAND, 4081 SQ.FT. OF LAND WAS H ANDED OVER TO THE BUILDER FOR A TOTAL CONSIDERATION OF ` 70,00,000/- AND COST OF THE FLAT MEASURING 1300 SQ.FT. IN THE FIRST FLOOR WITH CAR P ARK TO THE EXTENT OF ` 24,70,000/- TO BE CONSTRUCTED BY THE BUILDER. ACCO RDING TO THE LD. COUNSEL, SO AS TO ENABLE THE DEVELOPER TO CONSTRUCT THE BUILDING, THE ASSESSEE HAD TO DEMOLISH THE EXISTING BUILDING. SI NCE THE EXISTING BUILDING HAD TO BE DEMOLISHED, THE DEVELOPER / BUIL DER AGREED TO PAY ` 6500/- PER MONTH AS COMPENSATION FOR RENT TO THE AS SESSEE TILL HANDING OVER OF THE FLAT AS AGREED TO THE ASSESSEE. 3. THE LD.COUNSEL FURTHER SUBMITTED THAT THE PROPER TY WAS, IN FACT, INHERITED BY THE ASSESSEE FROM HIS FATHER SHR I S. LAKSHMINARASIMHAN THROUGH A WILL DATED 19.03.1979. THEREFORE, THE COST OF THE LAND FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN 3 I.T.A. NO.2197/MDS/15 HAS TO BE TAKEN AS COST OF THE PROPERTY TO THE PREV IOUS OWNER, NAMELY, THE ASSESSEES FATHER. THE ASSESSEE HAS CL AIMED THE COST OF THE LAND AT ` 101.66 PER SQ.FT. AND ` 150 PER SQ.FT. FOR THE BUILDING. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE A SSESSEE ON THE BASIS OF SO-CALLED GUIDELINE VALUE SAID TO BE RECEI VED FROM SUB REGISTRAR. THE ASSESSING OFFICER COMPUTED THE COST OF THE LAND AT ` 37,381/-. THE ASSESSING OFFICER, HOWEVER, REFUSED TO TAKE THE COST OF THE BUILDING ON THE GROUND THAT THE ASSESSEE WAS REQUIRED TO SELL ONLY THE UNDIVIDED SHARE OF 4081 SQ.FT. OF LAND AND THE WHOLE BUILDING WHICH WAS EXISTING HAD TO BE NECESSARILY D EMOLISHED. ACCORDINGLY, THE ASSESSING OFFICER FOUND THAT THE A SSESSEE IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 54 OF THE ACT. THE ASSESSING OFFICER ALSO DISALLOWED ` 28,20,000/- CLAIMED BY THE ASSESSEE UNDER SECTION 54 OF THE ACT. IN THE REVISED COMPUTATION, THE ASSESSEE HAS ALSO CLAIMED ` 3,50,000/- AS INVESTMENT MADE IN THE NEW FLAT OVER AND ABOVE ` 24,70,000/- MENTIONED IN THE AGREEMENT. THIS CLAIM OF ` 3,50,000/- WAS REJECTED BY THE ASSESSING OFFICER ON THE GROUND THAT IT IS AFTERTHOUGHT. ACCORDING TO THE LD. COUN SEL, THE COST OF THE LAND AND BUILDING HAS TO BE TAKEN ON THE BASIS OF M ARKET VALUE AND NOT ON THE BASIS OF GUIDELINE VALUE. ACCORDING TO THE LD. COUNSEL, THE GUIDELINE VALUE IS ONLY TO GUIDE THE SUB REGIST RAR TO DETERMINE 4 I.T.A. NO.2197/MDS/15 THE MARKET VALUE OF THE PROPERTY AND THE SUB REGIST RARS GUIDELINE VALUE CANNOT BE CONSIDERED TO BE MARKET VALUE. AT THE BEST, THE GUIDELINE VALUE MAY BE ONE OF THE FACTORS TO BE CONSIDERED FOR THE PURPOSE OF DETERMINING THE MARKET VALUE OF THE PROPERTY. 4. REFERRING TO THE RENT RECEIVED TO THE EXTENT OF ` 6500/- PER MONTH, THE LD.COUNSEL SUBMITTED THAT THE RENT WAS R ECEIVED TO COMPENSATE THE ASSESSEE SINCE THE EXISTING HOUSE NE EDS TO BE DEMOLISHED. THEREFORE, IT CANNOT BE CONSIDERED TO BE PART OF SALE CONSIDERATION FOR TRANSFER OF LAND AND BUILDING. T HE RENT PAID BY THE BUILDER IS FOR THE ACCOMMODATION OF THE ASSESSEE TI LL THE COMPLETION OF CONSTRUCTION AND HANDING OVER THE FLAT TO THE AS SESSEE AS PER THE AGREEMENT. THEREFORE, AT ANY STRETCH OF IMAGINATIO N, THE SAME CANNOT BE TREATED AS PART OF SALE CONSIDERATION. 5. ON THE CONTRARY, SHRI A.V. SREEKANTH, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE HAS ADM ITTEDLY SOLD PART OF THE PROPERTY INHERITED FROM HIS FATHER, BY MEANS OF WILL, AT DOOR NO.18, I CROSS STREET, LAKE AREA, NUNGAMBAKKAM , CHENNAI TO M/S BALA ABIRAMI BUILDERS & DEVELOPERS P. LTD. FOR A TOTAL CONSIDERATION OF ` 70,00,000/- AND FLAT WORTH ` 24,70,000/- TO BE CONSTRUCTED BY THE BUILDER. THE ASSESSEE HAS ALSO RECEIVED A SUM 5 I.T.A. NO.2197/MDS/15 OF ` 6500/- AS RENT TILL THE BUILDER CONSTRUCTED THE FLA T AND HANDED OVER TO THE ASSESSEE. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE RECEIVED ` 6500/- FOR EIGHT MONTHS. ACCORDINGLY, HE FOUND ` 52,000/- WAS RECEIVED AS RENTAL COMPENSATION RECEIV ED FROM THE BUILDER. ACCORDINGLY, THE SAME WAS TREATED AS PART OF SALE CONSIDERATION. THE LD. D.R. FURTHER SUBMITTED THAT THE COST OF THE LAND WAS TAKEN AS ` 101.66 PER SQ.FT. BY THE ASSESSEE WITHOUT ANY BASIS. THE ASSESSING OFFICER HAS RIGHTLY CALLED FO R THE GUIDELINE VALUE FROM THE SUB REGISTRAR AND THE SUB REGISTRAR HAS INFORMED THE ASSESSING OFFICER THAT THE GUIDELINE VALUE FOR THIS PROPERTY IS ` 9.16 PER SQ.FT. THEREFORE, ACCORDING TO THE LD. D. R., THE SAME WAS RIGHTLY ADOPTED BY THE ASSESSING OFFICER. 6. REFERRING TO EXEMPTION UNDER SECTION 54 OF THE A CT, THE LD. D.R. SUBMITTED THAT THE ASSESSEE DEMOLISHED THE EXI STING BUILDING AND WHAT WAS HANDED OVER TO THE DEVELOPER WAS ONLY VACANT LAND. FOR THE PURPOSE OF CONSTRUCTING THE BUILDING, THE A SSESSEE HAD TO NECESSARILY DEMOLISH THE EXISTING BUILDING. SINCE THE ASSESSEE HAS TRANSFERRED THE LAND ALONE AND NOT THAT OF RESIDENT IAL HOUSE, THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION UNDER SECTIO N 54 OF THE ACT. REFERRING TO THE RENT RECEIVED BY THE ASSESSEE, THE LD. D.R. 6 I.T.A. NO.2197/MDS/15 SUBMITTED THAT THE RENT WAS PAID BY THE BUILDER TIL L THE FLAT WAS CONSTRUCTED AND HANDED OVER TO THE ASSESSEE. THIS PAYMENT HAS NEXUS WITH THAT OF DEVELOPMENT AGREEMENT. BUT FOR THIS DEVELOPMENT AGREEMENT AND TRANSFER OF LAND, THE BUI LDER WOULD NOT HAVE AGREED TO PAY ` 6500/- PER MONTH TO THE ASSESSEE AS RENT. THIS RENT WAS PAID TO THE ASSESSEE SO THAT THE ASSE SSEE CAN RESIDE IN A RENTAL HOUSE TILL THE FLAT IS CONSTRUCTED AND READY FOR OCCUPATION. SINCE THE PAYMENT HAS NEXUS WITH THAT OF DEVELOPMEN T AGREEMENT AND HANDING OVER OF POSSESSION OF PROPERTY, THE ASS ESSING OFFICER HAS RIGHTLY FOUND THAT THIS WAS A PART OF SALE CONS IDERATION, THEREFORE, NO INTERFERENCE IS CALLED FOR. 7. REFERRING TO THE ADDITIONAL EXPENDITURE OF ` 3,50,000/- ON THE NEW FLAT, THE LD. D.R. SUBMITTED THAT THE COST OF T HE FLAT, WHICH WAS ALLOTTED TO THE ASSESSEE, WAS ESTIMATED AT ` 24,70,000/- AND THE ASSESSEE HAS CLAIMED THAT HE INCURRED AN EXPENDITUR E OF ` 3,50,000/- OVER AND ABOVE THE ABOVE SAID SUM OF ` 24,70,000/-. IN THE ABSENCE OF ANY MATERIAL FILED BY THE ASSESSEE B EFORE THE CIT(APPEALS) OR BEFORE THIS TRIBUNAL REGARDING THE SO-CALLED EXPENDITURE OF ` 3,50,000/-, THE LD. D.R. SUBMITTED THAT THE 7 I.T.A. NO.2197/MDS/15 CIT(APPEALS) HAS RIGHTLY CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE ENTERED INTO A DEVELOPMENT AGREEMENT FOR S ALE OF A RESIDENTIAL HOUSE WITH M/S BALA ABIRAMI BUILDERS & DEVELOPERS (P) LTD. ON 04.03.2004. THE EXISTENCE OF OLD HOUSE AND BUILDING IS NOT IN DISPUTE. THE COPIES OF THE PROPERTY TAX ASSESSM ENT, WHICH IS AVAILABLE AT PAGES 9 AND 10, WOULD DISCLOSE THE EXI STENCE OF BUILDING. THE CLAIM OF THE REVENUE APPEARS TO BE T HAT THE ASSESSEE HAD TO HAND OVER 4081 SQ.FT. OF LAND OUT OF 4664 SQ .FT. OF LAND. THEREFORE, THE ASSESSEE HAD TO NECESSARILY DEMOLISH THE EXISTING BUILDING. THE ASSESSING OFFICER DISALLOWED THE CLA IM OF THE ASSESSEE ON THE GROUND THAT WHAT WAS GIVEN TO THE B UILDER IS VACANT LAND AND NOT THE RESIDENTIAL HOUSE. THE ASSESSING OFFICER HAS ALSO TAKEN THE COST OF LAND AT ` 9.16 PER SQ.FT. ON THE BASIS OF THE GUIDELINE VALUE. AFTER CONSIDERING ALL MATERIAL AV AILABLE ON RECORD, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE EXISTENCE OF OLD BUILDING ON THE LAND IS NOT IN DISPUTE. IN FACT, O N THE DATE OF AGREEMENT FOR DEVELOPMENT / CONSTRUCTION, I.E. ON 0 4.03.2004, THE 8 I.T.A. NO.2197/MDS/15 BUILDING WAS VERY MUCH IN EXISTENCE. THE DEVELOPME NT AGREEMENT DOES NOT REFER TO THE EXISTENCE OF BUILDING. THERE FORE, THE REVENUE HAS TAKEN THE ADVANTAGE OF THIS OMISSION TO REFER T HE EXISTENCE OF THE BUILDING AND CLAIMED THAT WHAT WAS TRANSFERRED IS ONLY VACANT LAND AND NOT THE BUILDING. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE OLD BUILDING WAS VERY MUCH IN EXISTEN CE ON THE LAND, THE ASSESSEE COULD NOT HAVE TRANSFERRED THE LAND AL ONE TO THE DEVELOPER / BUILDER. IT IS NOBODYS CASE THAT THE ASSESSEE HIMSELF DEMOLISHED THE BUILDING. THE ASSESSEE HAD TO NECES SARILY TAKE THE ASSISTANCE OF BUILDER / DEVELOPER TO DEMOLISH THE E XISTING BUILDING BEFORE PROCEEDING FURTHER IN THE MATTER OF CONSTRUC TION OF MULTISTORIED BUILDING RESIDENTIAL COMPLEX. THEREFO RE, THERE IS NO JUSTIFICATION ON THE PART OF THE AUTHORITIES BELOW TO SAY THAT WHAT WAS TRANSFERRED BY THE ASSESSEE WAS ONLY THE LAND AND N OT THE BUILDING. EVEN FOR ARGUMENT SAKE, IT IS PRESUMED THAT THE EXI STING BUILDING WAS DEMOLISHED BY THE ASSESSEE, STILL THE DEMOLITIO N WAS ONLY FOR THE PURPOSE OF ENABLING THE BUILDER TO PUT A CONSTR UCTION IN PURSUANCE OF DEVELOPMENT AGREEMENT. THEREFORE, FOR ALL PRACTICAL PURPOSES, WHAT WAS TRANSFERRED IS ONLY THE RESIDENT IAL HOUSE AND NOT THE VACANT SITE. THEREFORE, THIS TRIBUNAL IS OF TH E CONSIDERED OPINION THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN SAYI NG THAT THE ASSESSEE 9 I.T.A. NO.2197/MDS/15 HAS TRANSFERRED ONLY LAND AND NOT THE RESIDENTIAL H OUSE. AFTER CONSIDERING ALL THE MATERIAL AVAILABLE ON RECORD, T HIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS TRANSF ERRED ONLY THE RESIDENTIAL HOUSE, THEREFORE, THE ASSESSEE IS VERY MUCH ELIGIBLE FOR EXEMPTION UNDER SECTION 54 OF THE ACT. 9. NOW, EVEN FOR ARGUMENT SAKE, IF WE CONSIDER THAT THE ASSESSEE HAS TRANSFERRED ONLY THE VACANT LAND AND N OT THE HOUSE, THE ASSESSEE IS VERY MUCH ELIGIBLE FOR EXEMPTION UN DER SECTION 54F OF THE ACT WHEN THE CAPITAL GAIN ARISING ON SUCH TR ANSFER WAS INVESTED IN THE RESIDENTIAL HOUSE / FLAT. EVEN IF THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION UNDER SECTION 54 OF THE ACT, THE ASSESSEE IS VERY MUCH ELIGIBLE FOR EXEMPTION UNDER SECTION 54F OF THE ACT. THEREFORE, DENIAL OF THE CLAIM OF THE ASSESSEE FOR EXEMPTION UNDER SECTION 54 / 54F OF THE ACT ON THE INVESTMENT MADE BY THE ASSESSEE IS NOT JUSTIFIED. ACCORDINGLY, THIS TRIBU NAL IS UNABLE TO UPHOLD THE ORDERS OF THE AUTHORITIES BELOW. 10. NOW COMING TO THE VALUE OF LAND AND BUILDING, T HE ASSESSEE HAS ADMITTEDLY INHERITED THE PROPERTY FROM HIS FATH ER LATE SHRI S. LAKSHMINARASIMHAN THROUGH A WILL DATED 19.03.1979. THIS FACT IS NOT IN DISPUTE. THEREFORE, THE COST OF PROPERTY TO THE ASSESSEES 10 I.T.A. NO.2197/MDS/15 FATHER HAS TO BE TAKEN AS COST OF THE PROPERTY TO T HE ASSESSEE. THE ASSESSEE WAS GIVEN OPTION TO TAKE THE VALUE AS ON 0 1.04.1981. THE ASSESSEE CLAIMS THAT THE COST OF THE LAND AS ON 01. 04.1981 WAS AT ` 101.66 PER SQ.FT. AND THE COST OF THE BUILDING AT ` 150/- PER SQ.FT. THE WHOLE BUILDING, WHICH WAS EXISTING, APPEARS TO BE 1200 SQ.FT. THE CLAIM OF THE ASSESSEE WAS REJECTED BY THE ASSES SING OFFICER ON THE BASIS OF GUIDELINE VALUE. THE ASSESSING OFFICE R HAS TAKEN THE COST OF THE LAND AT ` 9.16 PER SQ.FT. AS AGAINST ` 101.66 PER SQ.FT. AND HE HAS NOT TAKEN THE VALUE OF THE BUILDING AT ALL. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE GUIDELINE VALUE PRE SCRIBED BY THE STATE GOVERNMENT IS ONLY TO GUIDE THE SUB REGISTRAR TO DETERMINE THE CORRECT MARKET VALUE. THE GUIDELINE VALUE WOUL D NOT REFLECT THE MARKET VALUE IN ALL CIRCUMSTANCES. THE MARKET VALU E HAS TO BE DETERMINED WITH REGARD TO AREA OF THE PROPERTY, LOC ATION, INFRASTRUCTURE FACILITIES AVAILABLE AROUND THE AREA , POTENTIALITY FOR FUTURE DEVELOPMENT, ETC. THE GUIDELINE VALUE MAY A LSO BE ONE OF THE FACTORS TO BE TAKEN INTO CONSIDERATION FOR THE PURPOSE OF DETERMINING THE MARKET VALUE OF THE PROPERTY ALONG WITH OTHER FACTORS. WHAT WAS TO BE DETERMINED AS ON 01.04.198 1 IS THE MARKET VALUE OF THE PROPERTY AND NOT THE GUIDELINE VALUE. THE MARKET VALUE IS NOTHING BUT A PRICE THAT MAY BE AGREED BETWEEN T HE A WILLING 11 I.T.A. NO.2197/MDS/15 PURCHASER AND VENDOR. IN THOSE CIRCUMSTANCES, BY T AKING INTO CONSIDERATION THE PROPERTY LOCATED AT LAKE AREA, NU NGAMBAKKAM, CHENNAI, THE INFRASTRUCTURE AVAILABLE AROUND THE AR EA, SCHOOLS AND COLLEGES AND THE DISTANCE BETWEEN THE SUBJECT LAND AND OTHER PUBLIC TRANSPORT SYSTEM AVAILABLE AROUND THE AREA, THIS TR IBUNAL IS OF THE CONSIDERED OPINION THAT THE COST OF THE LAND AS TAK EN BY THE ASSESSEE AT ` 101.66 PER SQ.FT. APPEARS TO BE MORE REASONABLE. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED I N TAKING THE GUIDELINE VALUE AS MARKET VALUE OF THE PROPERTY. H ENCE, THIS TRIBUNAL IS UNABLE TO UPHOLD THE ORDERS OF THE AUTH ORITIES BELOW. 11. NOW COMING TO THE COST OF THE BUILDING, THE ASS ESSING OFFICER HAS TAKEN THE LAND FOR THE PURPOSE OF COMPUTATION. WHEN THE EXISTENCE OF BUILDING IS NOT IN DISPUTE, THE ASSESS ING OFFICER CANNOT IGNORE THE BUILDING FOR THE PURPOSE OF COMPUTING TH E CAPITAL GAIN. WHETHER THE BUILDING WAS TRANSFERRED ALONG WITH LAN D OR THE ASSESSEE DEMOLISHED THE BUILDING FOR HANDING OVER T HE VACANT LAND BY ITSELF, THE FACT REMAINS THAT THERE WAS A BUILDI NG. THEREFORE, THE COST OF THE BUILDING IS ALSO TO BE TAKEN FOR CONSID ERATION FOR THE PURPOSE OF ASCERTAINING THE COST OF PROPERTY. THE ASSESSING OFFICER FAILED TO CONSIDER THE COST OF THE BUILDING. THERE FORE, THIS TRIBUNAL IS 12 I.T.A. NO.2197/MDS/15 OF THE CONSIDERED OPINION THAT THE COST OF THE LAND AS VALUED BY THE ASSESSEE AT ` 150 PER SQ.FT. HAS TO BE TAKEN INTO CONSIDERATION W HILE ARRIVING THE COST OF THE PROPERTY FOR THE PURPOSE O F COMPUTATION OF CAPITAL GAIN. 12. NOW COMING TO THE RENTAL INCOME SAID TO BE RECE IVED BY THE ASSESSEE AT ` 6500/- PER MONTH FROM AUGUST, 2004 FOR A PERIOD OF EIGHT MONTHS AS CLAIMED BY THE ASSESSEE IS NOT PART OF THE SALE CONSIDERATION. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THIS AMOUNT OF ` 6500/- WAS PAID BY THE BUILDER CONSEQUENT TO THE AGREEMENT BETWEEN THE PARTIES FOR TRANSFER OF 4081 SQ.FT. OF LAND FOR DEVELOPMENT. BUT FOR THIS AGREEMENT BETWEEN PARTIE S FOR TRANSFER OF LAND, THE BUILDER WOULD NOT HAVE GIVEN THE RENT TO THE EXTENT OF ` 6500/- PER MONTH. THEREFORE, THERE WAS NEXUS BETWE EN THE PAYMENT OF MONTHLY RENT OF ` 6500/- AND THE TRANSFER OF LAND TO THE EXTENT OF 4081 SQ.FT. HENCE, THIS TRIBUNAL IS OF T HE CONSIDERED OPINION THAT THE RENTAL INCOME RECEIVED AT ` 6500/- PER MONTH TO THE EXTENT OF ` 52,000/- IS PART OF THE SALE CONSIDERATION. THEREF ORE, IT HAS TO BE CONSIDERED AS PART OF SALE CONSIDERATION WHILE COMPUTING THE CAPITAL GAIN. 13 I.T.A. NO.2197/MDS/15 13. NOW COMING TO THE CLAIM OF EXEMPTION UNDER SECT ION 54 OF THE ACT, THE ASSESSEE CLAIMED DEDUCTION OF ` 28,20,000/- TOWARDS COST OF NEW FLAT. THE ASSESSEE CLAIMED BEFORE THE AUTHORITIES BELOW IN THE REVISED STATEMENT THAT THE ASSESSEE INVESTED ` 3,50,000/- IN THE NEW FLAT WITHIN A PERIOD OF THREE YEARS. THE A SSESSING OFFICER FOUND THAT THE COST OF THE FLAT AS PER THE AGREEMEN T IS ` 24,70,000/- THE CLAIM OF THE ASSESSEE TO THE EXTENT OF ` 28,20,000/- IS IN EXCESS OF ` 3,20,000/-. THEREFORE, THE ASSESSING OFFICER HAS N OT ALLOWED THE EXCESS CLAIM OF ` 3,20,000/-. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE COST OF THE FLAT WAS ` 24,70,000/- AS PER DEVELOPMENT AGREEMENT. THE ASSESSEE CLAIMS FURTHER INVESTMENT OF ` 3,50,000/- AND THE TOTAL COST COMES TO ` 28,20,000/-. THE INVESTMENT MADE BY THE ASSESSEE IS NOT IN DISPUTE. MERELY BECAUSE THE ASSESSEE COULD NOT PRODUCE VOUCHER OR B ILLS, THE UNDISPUTED DEVELOPMENT / EXPENDITURE MADE BY THE AS SESSEE CANNOT BE DISALLOWED. WHEN THE ASSESSEE CLAIMS THA T THE INVESTMENT WAS MADE AND THE INVESTMENT TO THE EXTEN T OF ` 3,50,000/- IS NOT IN DISPUTE, THIS TRIBUNAL IS OF T HE CONSIDERED OPINION THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 54 OF THE ACT TO THE EXTENT OF ` 28,20,000/- WHICH INCLUDED THE INVESTMENT MADE TO THE EXTENT OF ` 3,50,000/- OVER AND ABOVE THE 14 I.T.A. NO.2197/MDS/15 COST OF THE FLAT AT ` 24,70,000/-. THEREFORE, THIS TRIBUNAL IS UNABLE TO UPHOLD THE ORDER OF THE AUTHORITIES BELOW. ACCORDI NGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE MODIFIED AND THE ASSESSIN G OFFICER IS DIRECTED TO RECOMPUTE THE CAPITAL GAIN AS INDICATED ABOVE AND ALLOW EXEMPTION UNDER SECTION 54 OF THE ACT. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED ON 15 TH JULY, 2016 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 15 TH JULY, 2016. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-4, CHENNAI-34 4. PRINCIPAL CIT-5, CHENNAI 5. 69 ,1 /DR 6. :' ; /GF.